Manchester Finance Companies to Join Forces

  • Anil Kanda
  • 12 Oct, 2010

Ashley Commercial Finance Limited is to be acquired by Ultimate Finance Group plc. Ultimate, the AIM-quoted factoring, invoice discounting, trade finance and asset finance company, has today (12 October 2010) announced that it has conditionally agreed to acquire Ashley.

Ashley’s 27-strong team is expected to relocate to Ultimate’s Manchester office in Mosley Street within the next six months.

Jayne Merriman, Operations Director at Ashley Commercial Finance, added: “This is a really exciting opportunity for both companies. We believe the two parties will fit together beautifully. The enlarged group will be in an ideal position to dominate the SME market, offering an even greater choice of financial solutions and a more extensive network of clients and intermediaries.”

Austin Thorp, Managing Director (North) at Ultimate Finance, said: “Among the many opportunities we have seen over the years, Ashley stands out as being highly complementary to us in the services it offers to small businesses. While they will continue in their role as friend to the smaller business, we will continue to provide financial solutions to small and medium-sized companies looking for alternatives to the high street banks.”

Ashley will maintain its own brand identity, with the same team offering enhanced services to small businesses, from start-ups to small, established companies.

Deal summary:

The Acquisition constitutes a reverse takeover under the AIM Rules and will therefore require Shareholder approval.

  • Ultimate Finance Group plc is to acquire Ashley Commercial Finance Limited for an initial £4.75m (£3.7m cash and £1.05m in shares) conditional on shareholder approval;
  • £2.75m raised through a placing at 12p (£1.83m net of expenses) and acquisition finance facility entered into, of up to £2m;
  • Acquisition creates independent national force in growing factoring and invoice discounting market – the businesses are highly complementary, serving clients of different typical size, bringing major potential synergistic benefits;
  • Advantages include access to new clients and introducers, strengthened presence, opportunities in new markets, (joint marketing and cross-selling to respective client bases), client retention through mutual referrals and leveraging Ultimate’s wider product range;
  • Ashley 2010 operating profit of £0.7m, loan book of £4.4m and net assets of £0.94m; acquisition expected to be earnings-accretive, with savings up to £0.4 annually from the second year;
  • Enlarged Group in a good position to provide invoice finance as a viable alternative to bank overdraft facilities as conditions improve;
  • Lloyds to increase funding available to Enlarged Group to £34m.